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IN THE CHANCERY COURT OF SHELBY COUNTY, TENNESSEE

LARRY MAYALL, FIRST NATIONAL

REALTY, INC., MALCOLM SETTLES,

OLENA KEENE, PAM WRIGHT, and

Other Similarly Situated Agents of

FIRST NATIONAL REALTY, INC.,

Plaintiffs,

VS. NO. _________________

MEMPHIS AREA ASSOCIATION

OF REALTORS, INC.,

Defendant.

VERIFIED COMPLAINT FOR TEMPORARY RESTRAINING ORDER,

TEMPORARY AND PERMANENT INJUNCTION AND DAMAGES

The Plaintiffs, Larry Mayall, First National Realty, Inc., Malcolm Settles, Olena Keene, Pam Wright, and Other Similarly Situated Agents of First National Realty, Inc. hereby file this Complaint for Temporary Restraining Order, Temporary and Permanent Injunction and Damages against the Defendant, Memphis Area Association of Realtors, Inc., and in support thereof respectfully present to the Court the following:

1. That Plaintiff Larry Mayall is an adult resident citizen of Shelby County, Tennessee and is a former member of Defendant Memphis Area Association of Realtors, Inc. (hereinafter referred to as “Defendant MAAR”).

2. That Plaintiff First National Realty, Inc. (hereinafter referred to as “Plaintiff First National Realty”), is a domestic corporation organized and existing under the laws of the State of Tennessee.

3. That Plaintiff Malcolm Settles is an adult resident citizen of Shelby County, Tennessee and is a member of Defendant MAAR.

4. That Plaintiff Olena Keene is an adult resident citizen of Shelby County, Tennessee and is a member of Defendant MAAR.

5. That Plaintiff Pam Wright is an adult resident citizen of Shelby County, Tennessee and is a member of Defendant MAAR.

6. That Other Similarly Situated Agents of Plaintiff First National Realty are employed in Shelby County, Tennessee and are members of Defendant MAAR.

7. That Defendant MAAR is a domestic corporation organized and existing under the laws of the State of Tennessee, and whose registered agent for service of process is Jules C. Wade who may be served with process at 6393 Poplar Avenue, Memphis, Tennessee 38119.

8. That Plaintiff Larry Mayall is a licensed Real Estate Broker in the State of Tennessee and President of Plaintiff First National Realty. That Plaintiffs First National Realty, Olena Keene, Pam Wright, and Other Similarly Situated Agents were at all times herein parties to a Broker Affiliation Agreement with Plaintiff First National Realty. That Plaintiffs Malcolm Settles, Olena Keene, Pam Wright, and Other Similarly Situated Agents of Plaintiff First National Realty, are members of Defendant MAAR.

9. That Defendant MAAR is a membership association of Realtors® established to provide certain rights, benefits and privileges to its’ members, including but not limited to, access to the Multi-Listing Service (“MLS”) operated by and under the control of Defendant MAAR. The MLS is an integral and almost indispensible tool for every real estate broker’s business, and Defendant MAAR is the only entity within Shelby County that provides its members access to the MLS.

10. That on or about March 10, 2010, Plaintiffs Larry Mayall and First National Realty, filed a Complaint for Temporary Restraining Order, and Temporary and Permanent Injunction in this Honorable Court seeking injunctive relief due to Defendant MAAR’s threat to suspend Plaintiffs Larry Mayall, First National Realty and all associated agents from Defendant MAAR based on allegations that Plaintiff Larry Mayall was a “Principal” of 9to5 Realty, LLC (“9to5”), a non-realtor Real Estate Company. Plaintiff Larry Mayall, as well as others, provided Defendant MAAR with evidence that he had no ownership of 9to5, and therefore no ability to compel 9to5 Agents to join a local Realtor® board. This evidence notwithstanding, Defendant MAAR maintained its position that it would suspend the MAAR membership and MLS access of Plaintiffs Larry Mayall, First National Realty, and all First National Realty Agents.

11. A hearing was held on March 11, 2010 and a Temporary Restraining Order was entered on that day preventing the suspension and denial of access to the MLS. That Temporary Restraining Order was extended by Consent, and eventually expired on April 12, 2010. A Settlement Agreement was executed on April 12, 2010, and a Consent Order of Dismissal With Prejudice was entered with the Court on April 14, 2010. Included within the terms of the Settlement Agreement was a provision allowing Plaintiff Larry Mayall to resign his membership from MAAR.

12. On April 16, 2010, and April 19, 2010, Defendant MAAR sent letters to Plaintiffs Larry Mayall, Olena Keene, Pam Wright, and all other First National Realty Agents, advising that, due to Plaintiff Larry Mayall’s resignation from Defendant MAAR, their membership in Defendant MAAR would be terminated and their access to the MLS denied on May 4, 2010. (Letter of April 16, 2010, attached hereto as Exhibit 1). The stated reason for taking such action was the failure of Plaintiff First National Realty to have a Designated Realtor® with Defendant MAAR, as required by its by-laws.

13. On April 16, 2010, Plaintiff Malcolm Settles filed the necessary paperwork with the Tennessee Real Estate Commission to become Plaintiff First National’s Designated Realtor®. This Application was approved by the Tennessee Real Estate Commission on April 22, 2010.

14. On April 22, 2010, Plaintiff Malcolm Settles submitted an Application with Defendant MAAR to be the Designated Realtor® on behalf of Plaintiff First National Realty. (April 22, 2010 Application attached hereto as Exhibit 2).

15. On April 27, 2010, Defendant MAAR sent a letter to Plaintiff Malcolm Settles finding that the Application was “deficient and objectionable” and denying the application at that time. One of the reasons Defendant MAAR denied the Application was due to Plaintiff Larry Mayall’s continued relationship with Plaintiff First National Realty. Defendant MAAR claimed that Plaintiff Larry Mayall must sever all connections with Plaintiff First National Realty in order for the Application of Plaintiff Malcolm Settles to be approved. The letter states “[Y]ou are not eligible for membership in MAAR as the Branch Designated Realtor® or the Designated Realtor® for First National unless and until Mr. Mayall severs his connection with First National.” (April 27, 2010 letter attached hereto as Exhibit 3).

16. As an additional ground for denying the Application of Plaintiff Malcolm Settles, Defendant MAAR relied upon the failure of Plaintiff First National Realty to submit reinstatement fees for all affiliated Realtors®. Defendant MAAR concluded that the resignation of Plaintiff Larry Mayall from MAAR had the effect of causing the automatic resignation of the over 150 Realtors® affiliated with Plaintiff First National Realty. In order to reinstate the membership of all Realtors® affiliated with Plaintiff First National Realty, Defendant MAAR insisted upon the payment by Plaintiff First National Realty of a Fifty Dollar $50.00 reinstatement fee for each affiliated Realtor®.

17. All the affiliated Realtors® with First National are independent contractors, and First National does not pay MAAR membership dues for those Realtors®. Those fees would have to be paid by the individual Realtors®. Upon information and belief, all those Realtors® dues are current with MAAR.

18. Plaintiff Malcolm Settles resubmitted his Application to Defendant MAAR on April 28, 2010. (Application attached hereto as Exhibit 4). Plaintiff Malcolm Settles corrected the minor deficiencies in the application but did not submit payment of a reinstatement fee in the amount of Fifty Dollars ($50.00) for each First National Realty Agent who was likewise a member of Defendant MAAR, nor did Plaintiff First National Realty provide documentation verifying that Plaintiff Larry Mayall had severed all connection with First National Realty. MAAR refused to process Plaintiff Settles’ application.

19. Plaintiffs allege Defendant MAAR’s action in denying Plaintiff Malcolm Settles’ Application is arbitrary and capricious and inconsistent with how Defendant MAAR has treated other individuals in similar circumstances. Upon information and belief, Defendant MAAR has routinely approved applications for a Designated Realtor® in other instances where minor deficiencies were noted in the applications. Upon information and belief, Defendant MAAR has previously not required the payment of a Fifty Dollar ($50.00) reinstatement fee. Upon information and belief, Defendant MAAR has likewise not required a former Designated Realtor® to sever all ties with a real estate firm.

20. Plaintiff First National Realty has Broker Affiliation Agreements with each of its agents. Upon information and belief, Defendant MAAR’s actions in refusing to approve Plaintiff Malcolm Settles’ Application, in requiring a Fifty Dollar ($50.00) reinstatement fee and in threatening to deny access to the MLS are designed to induce the more than 150 agents to cancel their Broker Affiliation Agreements with Plaintiff First National Realty and affiliate with another real estate firm. Plaintiff First National Realty is Shelby County’s second largest real estate firm, and it will suffer irreparable harm if these more than 150 agents leave Plaintiff First National Realty. Further, if MLS access is denied to the more than 150 agents on May 4, 2010, those agents will suffer irreparable harm.

COUNT I

APPLICATION FOR INJUNCTIVE RELIEF

21. The allegations as set forth in Paragraphs 1 – 20 are hereby incorporated into Count I as if fully set forth here.

22. Unless Defendant MAAR is immediately and absolutely restrained from the suspension of Plaintiffs Settles, Keene, Wright, and Other Similarly Situated Agents’ membership privileges, including access to MLS, on May 4, 2010, these Plaintiffs will suffer immediate and irreparable damage for which there is no adequate remedy at law. The irreparable damage likely to be sustained by these Plaintiffs includes but is not limited to: the inability to access the MLS, a tool vital to the business of a real estate broker, and the loss of the business of potential buyers and/or sellers due to these Plaintiffs’ inability to access the MLS.

23. Unless enjoined, Defendant MAAR’s continued arbitrary and capricious denial of the Applications of Plaintiff Settles will result in immediate and irreparable damage to Plaintiff First National Realty and all of its’ affiliated Realtors®, for which there is no adequate remedy at law. The irreparable damage likely to be sustained by these Plaintiffs includes but is not limited to: the loss of business to Plaintiff First National Realty and its affiliated Realtors® due to their inability to access all real estate listings on the MLS; the loss of more than 150 affiliated Agents to Plaintiff First National Realty due to the lack of membership in the Defendant trade association and the inability to access MLS; and the loss of the business of potential buyers and/or sellers by Plaintiff First National Realty, the second largest real estate firm in Shelby County, due to its inadequate number of real estate agents and its inability to access MLS.

24. Unless Defendant MAAR is immediately and absolutely restrained from the requirement that Plaintiff Mayall sever his relationship with Plaintiff First National Realty, this action will result in immediate and irreparable harm to Plaintiffs Mayall and First National Realty for which there is no adequate remedy at law. The irreparable harm likely to be sustained by Plaintiff Mayall includes but is not limited to: loss of profits due to the divestiture of his ownership of the second largest real estate company in Shelby County, Tennessee; a loss of his property and economic rights as the owner of Plaintiff First National Realty; and damage to his reputation. The irreparable harm likely to be sustained by Plaintiff First National Realty includes but is not limited to: loss of its President, disruption of its daily business operations due to the loss of its President, loss of profits due to the disruption in daily business operations, a potential failure of the entire business and damage to its good will upon which its business is based.

25. A preliminary injunction is necessary because the threatened impending action of Defendant MAAR on May 4, 2010 would render final relief ineffectual.

26. There is a strong likelihood that the Plaintiffs will prevail in this case at the final hearing on the merits.

27. There is no adequate remedy at law for the Plaintiffs.

28. WHEREFORE, the Plaintiffs prays for the following relief:

(a) That the Court set a date for a hearing on the Plaintiffs’ request for a Preliminary Injunction;

(b) That upon hearing, the Court enter a Preliminary Injunction (1) ordering Defendant MAAR to reinstate Plaintiffs Settles, Keene, Wright and Other Similarly Situated Agents of Plaintiff First National Realty’s association and membership in Defendant MAAR; (2) prohibiting Defendant MAAR from terminating the membership privileges, including access to MLS, on May 4, 2010; (3) prohibiting Defendant MAAR from requiring Plaintiff Mayall to sever his relationship with Plaintiff First National Realty; (4) prohibiting Defendant MAAR from denying Plaintiff Settles’ Application for Designated Realtor® for arbitrary and capricious reasons; (5) prohibiting Defendant MAAR from requiring the more than 150 agents of Plaintiff First National from being required to pay a Fifty Dollar ($50.00) reinstatement fee; and (6) that the Preliminary Injunction be made permanent upon final hearing;

(c) For such other and further equitable relief which the Court deems equitable and proper.

COUNT II

UNLAWFUL INDUCEMENT OF BREACH OF CONTRACT

IN VIOLATION OF TENNESSEE CODE ANNOTATED § 47-50-109

29. Paragraphs 1 – 28 are incorporated herein by reference.

30. Defendant MAAR knew that Plaintiffs Settles, Keene, Wright, and Other Similarly Situated Agents were affiliated real estate brokers with Plaintiff First National Realty, and knew or should have known that they were parties to a Broker Affiliation Agreement.

31. As a result of Defendant MAAR’s actions in refusing to approve Plaintiff Malcolm Settles application, Plaintiff First National real estate agent Brian Mallory has decided to leave Plaintiff First National and is no longer adhering to the terms of his Broker Affiliation Agreement.

32. Defendant MAAR induced Brian Mallory to cancel his Broker Affiliation Agreement with Plaintiff First National Realty by terminating Plaintiffs Settles, Keene, Wright, and Other Similarly Situated Agents’ association and membership with Defendant MAAR due to Defendant MAAR’s arbitrary and capricious denial of Plaintiff Settles’ Application for Designated Realtor®.

33. Defendant MAAR willfully and maliciously interfered and is interfering in the Broker Affiliation Agreements entered into between Plaintiffs Settles, Keene, Wright, and Other Similarly Situated Agents and Plaintiff First National Realty, causing damage to Plaintiff First National Realty.

34. Defendant MAAR knowingly, willfully, and maliciously interfered and is interfering in the contractual relationship between Plaintiff First National Realty and Plaintiffs Settles, Keene, Wright, and Other Similarly Situated Agents, and induced the breach of the Broker Affiliation Agreements, in violation of Tennessee Code Annotated § 47-50-109.

35. WHEREFORE, the Plaintiffs prays for a judgment in its favor against Defendant MAAR for compensatory and punitive damages in an amount to be proven at trial and for treble compensatory damages and attorneys’ fees pursuant to Tennessee Code Annotated § 47-50-109, in an amount proven at trial, and for such further relief as this Court deems just and equitable.

COUNT III

INTENTIONAL INTERFERENCE WITH CONTRACTUAL RELATIONS

36. Paragraphs 1 – 35 are incorporated herein by reference.

37. Defendant MAAR knew that Plaintiffs Settles, Keene, Wright, and Other Similarly Situated Agents were affiliated Realtors® of Plaintiff First National Realty.

38. At all relevant times herein, Defendant MAAR knew or should have known of the existence of the Broker Affiliation Agreements in effect between Plaintiff First National Realty and Plaintiffs Settles, Keene, Wright, and Other Similarly Situated Agents.

39. As a result of Defendant MAAR’s actions in refusing to approve Plaintiff Malcolm Settles application, Plaintiff First National real estate agent Brian Mallory has decided to leave Plaintiff First National and is no longer adhering to the terms of his Broker Affiliation Agreement.

40. Defendant MAAR has induced Brian Mallory to cancel his Broker Affiliation Agreement.

41. By arbitrarily and capriciously denying Plaintiff Settles’ Applications for Designated Realtor® and by terminating the association membership of Plaintiff Settles, Keene, Wright, and Other Similarly Situated Agents, Defendant MAAR has intentionally interfered in Plaintiff First National Realty’s contractual relations with its’ Realtors®.

42. Defendant MAAR acted maliciously and in knowing and willful disregard of Plaintiff First National Realty’s rights, in that Defendant MAAR intentionally and deliberately interfered in the Realtors®’ Broker Affiliation Agreements.

43. As a result of Defendant MAAR’s actions as set forth in this Count, the Plaintiffs have suffered damages.

44. WHEREFORE, the Plaintiffs pray for a judgment in their favor against Defendant MAAR for compensatory and punitive damages in an amount to be proven at trial, plus their attorneys’ fees and costs and expended herein, and for any such further relief as this Court may deem just and equitable.

COUNT IV

INTENTIONAL INTERFERENCE WITH BUSINESS RELATIONS

45. Paragraphs 1 – 44 are incorporated herein by reference.

46. At all times relevant herein, Defendant MAAR knew or should have known of the existence of valid business relationships between Plaintiff First National Realty and all other named Plaintiffs and Other Similarly Situated Plaintiffs.

47. Defendant MAAR intentionally interfered and is interfering in Plaintiff First National Realty’s business relationship with its’ affiliated Realtors®, which is inducing and/or causing a termination, dimunition, and/or disruption in those business relationships.

48. As a result of Defendant MAAR’s actions in refusing to approve Plaintiff Malcolm Settles application, Plaintiff First National real estate agent Brian Mallory has decided to leave Plaintiff First National and is no longer adhering to the terms of his Broker Affiliation Agreement.

49. Defendant MAAR has also intentionally interfered and is interfering in Plaintiff Mayall’s business relationship with Plaintiff First National Realty, which is inducing and/or causing a termination, dimunition, and/or disruption in these business relationships.

50. Defendant MAAR has also intentionally interfered and is interfering with Plaintiff Malcolm Settles’ business relationship with Plaintiff First National Realty, which is causing a termination, dimunition and/or disruption in those business relationships.

51. Defendant MAAR acted maliciously, with ill will, and in knowing and willful disregard of Plaintiff First National Realty, Plaintiff Mayall, and Plaintiff Settles’ rights in a manner calculated to cause damage to these Plaintiffs.

52. As a result of Defendant MAAR’s actions, Plaintiffs First National Realty, Mayall and Settles have been damaged.

53. WHEREFORE, Plaintiffs First National Realty, Mayall and Settles pray for a judgment in their favor against Defendant MAAR for compensatory and punitive damages in an amount to be proven at trial, plus their attorneys’ fees and costs and expended herein, and for any such further relief as this Court may deem just and equitable.

COUNT V

BREACH OF SETTLEMENT AGREEMENT

54. Paragraphs 1 – 53 are incorporated herein by reference.

55. On April 12, 2010, Plaintiffs Mayall, First National Realty, and Defendant MAAR negotiated and entered into a Settlement Agreement, which was executed in response to the events alleged in Paragraphs 10 and 11 above. (The Settlement Agreement is attached hereto as Exhibit 5).

56. The Settlement Agreement was to resolve all issues between Plaintiff Mayall and First National Realty and Defendant MAAR. Within two (2) days of the entry of an Order dismissing the previous case, Defendant MAAR sent letters to the more than 150 First National Agents telling them that their memberships and MLS access would be canceled on May 4, 2010.

57 Nowhere within the Settlement Agreement does it state that Plaintiff Mayall’s resignation would result any adverse consequences for Plaintiff First National Realty or any of its agents.

58. Defendant MAAR breached the Settlement Agreement by taking actions against Plaintiff First National that were based upon the issues resolved fully and completely in the Settlement Agreement. This breach deprived Plaintiffs Mayall and First National Realty of the expected benefit of the negotiated and executed Settlement Agreement and, accordingly, they have suffered damages as a result thereof.

59. WHEREFORE, Plaintiffs First National Realty and Mayall pray for a judgment in their favor against Defendant MAAR for compensatory damages in an amount to be proven at trial, plus their attorneys’ fees and costs and expended herein, and for any such further relief as this Court may deem just and equitable.

Respectfully Submitted,

_______________________________

KIRK A. CARAWAY (#18578)

JESSICA A. BENTON (#25889)

Allen, Summers, Simpson, Lillie & Gresham, PLLC

Attorneys for Plaintiffs

80 Monroe Avenue, Suite 650

Memphis, Tennessee 38103

(901) 763-4200

VERIFICATION

STATE OF TENNESSEE )

COUNTY OF SHELBY )

I, Larry Mayall, being first duly sworn and under oath, states that he is the President of First National Realty, Inc., that he has read the foregoing Complaint for Temporary Injunction, Permanent Injunction, and Damages, that he is personally familiar with the facts stated therein and that the same are true and correct based upon his knowledge, information, and belief.

Larry Mayall

President, First National Realty, Inc.

STATE OF TENNESSEE )

COUNTY OF SHELBY )

Sworn to and subscribed before me this the day of , 2010.

NOTARY PUBLIC

My Commission Expires:

CERTIFICATE OF SERVICE

I, Kirk A. Caraway, do hereby certify that a copy of the foregoing Complaint was forwarded, via Hand Delivery on this the ____ day of May, 2010, to:

Paul Matthews

5400 Poplar Avenue

Suite 100

Memphis, Tennessee 38119-3678

________________________________

KIRK A. CARAWAY

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